Cash in on Centaur's comeback

Chief executive Andria Vidler, who took the reins a year ago after spearheading turnarounds at EMI UK and Magic FM, is leading the transformation. Instead of focusing on single products, Centaur has zeroed in on the marketing, financial, home interest and professional markets. That strategy has allowed it to sell more products to each customer, stave off competitors and reduce its 50 operational teams to just seven.

Centaur's divisions now share procurement and other services, and management has cracked down on inefficient product development and investment. That's expected to deliver £1m in annualised savings this year. The group is highly cash-generative, too, which should support dividend increases and acquisitions in the future.

Analysts at N+1 Singer believe Centaur is "on track to banish its volatile past". The group's recent performance supports that notion. After 18 months posting revenue declines, Centaur has unveiled that underlying revenues rose 6 per cent for the four months to 31 October. Revenues were down 1 per cent at the half-year mark. The turnaround was driven by paid-for content revenues, which rose by a fifth - and the rate of growth is still accelerating. Encouragingly, live events are returning to growth, too. And, although advertising revenues were down 7 per cent, that's an improvement from their first-half decline of 11 per cent, and advertising only accounted for 15 per cent of total revenues at the half-year stage compared with 28 per cent for digital paid-for content.

On a divisional basis, sales at Centaur's marketing division climbed 11 per cent as it relaunched Marketing Week across print, desktop and mobile, while revenues at its professional division grew by 14 per cent. The outlook is also positive, with deferred revenues up 17 per cent to £15m, partly due to strong demand for digital subscriptions.

While the recent trading is encouraging, Centaur does have its work cut out, and earnings are expected to be down for the current financial year before growth kicks in, in 2015. Indeed, cash profits in the half-year to the end of June were down 10 per cent. That was largely due to weakness in its financial segment, which has suffered due to stricter regulatory requirements that have sent advertisers and audiences scarpering. Divisional cash profits fell 29 per cent in the half-year and this only abated to a 15 per cent decline over the most recent four-month period. But management is taking steps to address the issue. They have appointed new leadership, relaunched Money Marketing and disposed of Perfect Information, a financial information business.